Newsquawk Daily European Equity Opening News - 8th February 2024

8th February 2024

ASIA

APAC stocks were ultimately mixed after the fresh record levels on Wall St where the S&P 500 touched just shy of the 5k level, while participants digested recent earnings releases and Chinese inflation data ahead of the Lunar New Year holidays. ASX 200 benefitted from strength in tech and property, while the utilities sector outperformed amid a surge in AGL Energy after it reported a four-fold increase in its core net and returned to a statutory profit for H1. Nikkei 225 outperformed and approached closer to the 37,000 level as earnings drove price action and with SoftBank among the biggest gainers after shares in unit Arm Holdings surged by around 20% post-earnings. Hang Seng and Shanghai Comp were mixed with the former dragged lower by weakness in tech after Alibaba shares slumped on disappointing earnings, while the mainland gained despite the soft inflation data with sentiment upbeat heading into the Lunar New Year holidays and after the PBoC injected liquidity. China also recently replaced CSRC Chairman Yi Huiman with Wu Qing who is nicknamed the “Broker Butcher” for his crackdown on traders. Nifty eventually weakened in the aftermath of the RBI rate decision where the central bank maintained its rates as expected and although there was a change in the vote split with MPC external member Varma the lone dissenter favouring a 25bps cut, the language from Governor Das remained hawkish in which he stated that monetary policy must be disinflationary and the MPC is to remain resolute in bringing inflation down to 4%.

Subaru (7270 JT) - 9-month (JPY) net 298.9bln (prev. 154.4bln Y/Y), rev. 3.50tln (prev. 2.81tln Y/Y), raises FY net guidance to 340bln from 320bln. (Newswires)

SK Hynix (000660 KS)/TSMC (2330 TT) - Cos. are to create an AI chip alliance which will include cooperation on developing 6th generation HBM chips. according to sources. "The AI semiconductor alliance is interpreted as a move to build a united front against Samsung Electronics (005930 KS)" (Pulse News Korea)

Softbank (9984 JT) - Q3 (JPY): Net Income 950bln (exp. 373bln), Vision Fund investment gain 600bln (prev. 21.3bln)

EUROPEAN CLOSES

CLOSES: DAX: -0.65% at 16,921.96, FTSE 100: -0.68% at 7,628.75, CAC 40: -0.36% at 7,611.26, Euro Stoxx 50: -0.29% at 4,677.45, IBEX 35: -1.15% at 9,888.20, FTSE MIB: -0.45% at 30,976.02, SMI: -0.32% at 11,208.90.

SECTORS: IT 0.89%, Consumer Disc 0.18%, Healthcare 0.00%, Industrials -0.12%, Materials -0.47%, Consumer Stpl -0.65%, Utilities -0.78%, Financials -0.80%, Telecoms -0.89%, Energy -1.70%

FTSE 100

BP (BP/ LN) - Plans to keep Whiting Indiana Refinery (435k capacity) shut for up to three weeks for inspections after a recent power loss, via Reuters citing a person familiar with the matter. (Reuters)

UK RICS / Housing Names - UK RICS House Price Balance (Jan) -18 vs. Exp. -25 (Prev. -30, Rev. -29); Housing Survey (Jan) -18.0 vs. Exp. -25.0 (Prev. -30.0, Rev. -29). (Newswires)

OTHER UK COMPANIES

BROKER MOVES

Intercontinental (IHG LN) downgraded to Hold from Buy at SocGen

London Stock Exchange (LSEG LN) downgraded to Neutral from Sell at UBS

Redrow (RDW LN) downgraded to Hold from Buy at Jefferies

DAX

Deutsche Boerse (DB1 GY) - FY23 (EUR): Revenue 5.077bln (exp. 5.334bln), EBITDA 2.944bln (exp. 3.23bln, prev. 0.6bln Y/Y), Adj. EPS 9.35 (exp. 10.1), Net income 1.724bln (exp. 1.86bln); proposes to increase dividend to 3.80/shr. Outlook for 2024 is in line with the horizon 2026 growth trajectory. (Newswires)

Siemens (SIE GY) - Q4 (EUR): Net Income 2.5bln (exp. 1.7bln). Industrial Business Profit 2.72bln (exp. 2.67bln). Revenue 18.4bln (exp. 18.8bln); Free cash flow rose sharply to EUR 1.0bln (prev. 86mln) driven by Industrial Business. Reaffirms FY24 outlook. OUTLOOK: Expects Industrial Business to drive an increase in basic EPS pre-PPA (EPS from net income before purchase price allocation accounting) in fiscal 2024 to a range of EUR 10.40-11.00 (prev. EUR 9.93 in FY23). Digital Industries expects for fiscal 2024 comparable revenue development of 0% to 3%. This is based on the assumption that following destocking by customers, global demand in the automation businesses, especially in China, will pick up again in the second half of the fiscal year. The profit margin is expected to be 20% to 23%. Smart Infrastructure expects for fiscal 2024 comparable revenue growth of 7% to 10%. The profit margin is expected to be 15% to 17%. Mobility expects for fiscal 2024 comparable revenue growth of 8% to 11%. The profit margin is expected to be 8% to 10%. CEO says Chinese private consumption drops and Chinese markets are still very slow. Co. hopes to see a pick up in China this year. (Siemens). Index Weightings: DAX 40: 8.8% (Second largest); Euro Stoxx 50: 3.4%; Stoxx 600: 1.1%

OTHER GERMAN COMPANIES

Talanx (TLX GY) – FY23 (EUR): Net 1.58bln (prev. guided >1.5bln), Insurance Revenue 43.2bln (prev. 39.7bln Y/Y). (Newswires)

Nemetschek (NEM GY) - FY23 (EUR): EBITDA 257.7mln (exp. 254.2mln), Revenue 851.6mln (exp. 849.9mln). (Newswires)

Suedzucker (SZU GY) - Unit in Illinois announces extension of voluntary recalling of vegan pizza due to the potential presence of milk. (Newswires)

BROKER MOVES

Vonovia (VNA GY) initiated with Buy at Baader Helvea

CAC

Airbus (AIR FP) - January: Deliveries 30, Booked 31 gross aircraft orders, Booked 31 net aircraft orders, Delivered 13 A321NEO and 13 A320NEO. (Newswires)

Danone (BN FP) - New report suggests dwindling Dairy Heifer number may inhibit new milk production. (Newswires)

Credit Agricole (ACA FP) - Q4 (EUR): Net Income 1.33bln (exp. 1.29bln). Underlying Revenue 8.677bln (prev. 8.914bln Y/Y). Gross Operating Income 2.991bln (prev. 3.715bln). Cost of Risk 762mln (prev. 753mln). CET1 ratio 17.5% (prev. 17.5% Q/Q). (Credit Agricole)

SocGen (GLE FP) - Q4 (EUR) Net Income 430mln (exp. 450.6mln). Revenue 5.96bln (prev. 6.61bln Y/Y). Operating Profit 930mln (prev. 1.74bln Y/Y). Co. is to launch a share buyback of about EUR 280mln. OUTLOOK: Revenue growth at or above +5% vs. 2023. Cost-to-income ratio less than 71% in 2024. Net cost of risk between 25 and 30 basis points in 2024. ROTE of more than 6% in 2024. CET1 ratio of around 13% at end-2024. (SocGen)

Vinci (DG FP) - FY 2023 (EUR): EBIT 8.36bln (exp. 8.00bln), Revenue 68.84bln (exp. 68.05bln). FY24 Net Income view "close to" FY23 (exp. +6.0%), FY24 turnover seen a "less amount" vs FY23 (exp. +3.3%). (Newswires)

OTHER FRENCH COMPANIES

Atos (ATO FP) - Credit Agricole (ACA FP) has backed away from Atos refinancing, according to the FT citing people familiar with the matter. (FT)

Ipsen (IPN FP) - FY (EUR): Revenue 3.13bln (exp. 3.24bln), EPS 9.15 (exp. 8.93). FY Guidance has total sales growth of over 6% and a core operating margin of 30% of total sales. (Newswires)

Soitec (SOI FP) - Q3 (EUR): Revenue 240mln (exp. 251mln). Guides FY24 Revenue -10% Y/Y, EBITDA margin approx. 34%. (Newswires)

Orpea (ORP FP) – Announces EUR 390mln rights issue at EUR 0.0133/shr. (Newswires)

BROKER MOVES

Axa (CS FP) downgraded to Hold from Buy at HSBC

Renault (RNO FP) upgraded to Outperform from Neutral at BNP Paribas

PAN EUROPE

Adyen (ADYEN NA) – FY (EUR): Revenue 1.6bln (exp. 1.64bln), EBITDA 423mln (exp. 720mln). H2: EBITDA 423mln (prev. 372mln Y/Y), Revenue 887mln (exp. 876mln). (Newswires)

ArcelorMittal (MT NA) - Q4 (USD): Revenue 14.6bln (exp. 15.7bln). EBITDA 1.27bln (exp. 1.23bln). Net Income -2.97bln (exp. -1.82bln). Co. says Chinese economic growth "is expected to weaken". Co. remains positive on the medium/long-term steel demand outlook. OUTLOOK "As anticipated, apparent demand conditions are now showing signs of improvement as the destocking phase reaches maturity." "Despite continued headwinds to real demand, World ex-China apparent steel consumption ("ASC") in 2024 is expected to grow by +3.0% to +4.0% as compared to 2023." OUTLOOK BY KEY REGIONS: In the US, although real demand growth is expected to remain lacklustre due to the lagged impact of higher interest rates, the destocking that impacted apparent demand in 2023 is not expected to continue in 2024. As a result, apparent steel consumption of flat products is expected to grow by +1.5% to +3.5%; In Europe, whilst the Company assumes a marginal decline in real demand, mainly construction, the destocking that impacted apparent demand in 2023 is not expected to continue in 2024. As a result, apparent demand for flat products is expected to improve, with growth within a range of +2.0% to +4.0%; In China, economic growth is expected to weaken. Despite continued weakness in real estate, the impact of the announced stimulus is expected to support offsetting demand growth from infrastructure spending. As a result, steel consumption is expected to be relatively stable/slightly positive (+0% to +2%). PRODUCTION METRICS Crude steel production (Mt) 13.7 (prev. 15.2 Q/Q). Steel shipments (Mt) 13.3 (prev. 13.7 Q/Q). Total Group iron ore production (Mt) 10.0 (prev. 10.7 Q/Q). Iron ore production (Mt) (AMMC and Liberia only) 6.2 (prev. 6.7 Q/Q). Iron ore shipment (Mt) (AMMC and Liberia only) 6.1 (prev. 6.3 Q/Q). (ArcelorMittal)

Auto Names - China Retail Passenger Vehicle Sales (Jan): 13.9% M/M, 57.4% Y/Y, via PCA. China Auto Industry Body official says battery vehicle sales were -37% in Jan M/M; far below market expectations, which is a main source of pressure on auto market growth. (PCA/Newswires)

BPER (BPE IM) - Q4 2023 (EUR): Net profit 432.4mln (exp. 420mln, prev. -17.4mln Y/Y), Revenue 1.47bln (exp. 1.37bln), Net interest income 870.3mln (prev. 565.5mln), Net fees 529mln (prev. 524.1mln); in 2024 sees slight decrease in NII. (Newswires)

Chip Names - SK Hynix (000660 KS)/TSMC (2330 TT) are to create an AI chip alliance which will include cooperation on developing 6th generation HBM chips. according to sources. "The AI semiconductor alliance is interpreted as a move to build a united front against Samsung Electronics (005930 KS)" (Pulse News Korea)

KBC Groep (KBC BB) - Q4 (EUR): PBT 836mln (exp. 894mln), NII 1.36bln (exp. 1.32bln), Net Fee Income 0.6bln (exp. 0.59bln), EPS 1.59 (exp. 1.64). FY24 Guidance: NII 5.3-5.5bln (exp. 5.4bln). (Newswires)

Telecom Italia (TIT IM) - Gives mandate to CEO to negotiate a new offer for Sparkle with Italy's Economic Ministry. This comes after the Co. rejected the EUR 750mln bid by the Italian government for the acquisition of Sparkle, according to Bloomberg. (Newswires/Bloomberg)

BROKER MOVES

Generali (G IM) upgraded to Buy from Hold at HSBC

Prosus (PRX NA) initiated with Buy at Kepler

SMI

Swisscom (SCMW SW) - FY (CHF): Revenue 11.07bln (exp. 11.09bln), EBITDA 4.6bln (exp. 4.5bln), EBIT 2.2bln (exp. 2.2bln), Net 1.7bln (exp. 1.7bln), Dividend 22/shr (exp. 22/shr). FY Outlook: Revenue 11bln (exp. 11.07bln), EBITDA 4.5-4.6bln (exp. 4.5bln). (Newswires)

OTHER SWISS COMPANIES

Swiss Prime (SPSN SW) - FY (CHF): Rental Income 438mln, Real Estate AUM 21.5bln, +9%. Expect a more favourable market environment for asset management in 2024. (Newswires)

BROKER MOVES

Zurich Insurance (ZURN SW) downgraded to Hold from Buy at HSBC

SCANDINAVIA

Boliden (BOL SS) – Q4 (SEK): EPS 6.06 (prev. 9.42 Y/Y), Adj. Op. 2.02bln (exp. 1.80bln), Revenue 20.8bln (exp. 19.6bln). (Newswires)

Fingerprint Cards (FINGB SS) - Q4 (SEK): EBITDA -83.8mln (prev. -74.3mln Y/Y), Revenue 200.3mln (prev. 190.3mln Y/Y). (Newswires)

Huhtmaki (HUH1V FH) – Q4 (EUR): EPS 0.68 (exp. 0.62), Adj. EBIT 108mln (exp. 100mln), Revenue 1.03bln (exp. 1.05bln). (Newswires)

GN Store Nord (GN DC) - Q4 (DKK): Adj. EBITDA 644mln (prev. 744mln Y/Y), Rev 5.07bln (prev. 5.27bln Y/y). Guides initial FY24 organic Revenue +2-8%, EBITA margin +12-14%. (Newswires)

Novo Nordisk (NOVOB DC) - European drugs regulator EMA says it will assess the impact of the availability of medicines made at Catalent (CTLT) sites that were sold to Novo Nordisk (NOVOB DC). CEO says Co. is confident in clearing antitrust hurdles for Catalent (CTLT) deal, via Bloomberg TV interview. In other news, Vivus received US FDA NDA supplement 24 approval for Qsymia. (Bloomberg TV/Newswires)

Skanska (SKAB SS) – Prepares new data centre in Norway for NOK 1.1bln. (Newswires)

Orsted (ORSTED DC) - S&P cuts rating one notch to BBB (prev. BBB), with outlook stable.

Orkla (ORK NO) - Q4 (NOK): EBIT 1.6bln (exp. 1.76bln), Revenue 17.7bln (exp. 17.7bln), PBT 1.3bln (exp. 1.9bln). FY23 total dividend of 6/shr (exp. 3.15/shr). Average market price of raw and packaged materials stabilised during 2023, indications of lower input factors costs in H1. (Newswires)

BROKER MOVES

AAK (AAK SS) downgraded to Sell from Hold at Handelsbanken

Fortum (FORTUM FH) downgraded to Hold from Buy at SEB

Handelsbanken (SHBA SS) downgraded to Hold from Buy at Arctic Securities

Nordic Semiconductor (NOD NO) upgraded to Equal Weight from Underweight at Barclays

Nordic Semiconductor (NOD NO) upgraded to Neutral from Sell at UBS

Pandora (PNDORA DC) upgraded to Buy from Hold at HSBC

UPM-Kymmene (UPM FH) downgraded to Neutral from Buy at Citi

US

CLOSES: SPX +0.82% at 4,995, NDX +1.04% at 17,775, DJIA +0.40% at 38,677, RUT -0.17% at 1,950.

SECTORS: Technology +1.43%, Consumer Discretionary +1.12%, Communication Services +0.94%, Materials +0.81%, Financials +0.69%, Industrials +0.64%, Health +0.26%, Energy +0.17%, Utilities +0.05%, Real Estate -0.06%, Consumer Staples -0.08%.

Arm Holdings (ARM) - Q3 2024 (USD): Adj. EPS 0.29 (exp. 0.25), Revenue 824mln (exp. 762mln). Sees Q4 Adj. EPS at USD 0.28-0.32 (exp. 0.21). Sees Q4 revenue USD 850mln-900mln (exp. 778.5mln) Raises FY Adj. EPS forecast to USD 1.20-1.24 from 1.00-1.10 (exp. 1.05). Raises FY revenue forecast to USD 3.16bln-3.21bln from USD 2.96bln-3.08bln (exp. 3.02bln). Executive says China business grew to 25% of revenue on Q3 from 20% in Q2. (Newswires)

PayPal Holdings Inc (PYPL) - Q4 2023 (USD): EPS 1.48 (exp. 1.36), Revenue 8.02bln (exp. 7.87bln). Total payment volume USD 409.83bln (exp. 403.6bln). Transaction revenue USD 7.28bln (exp. 7.1bln). Active customer accounts 426mln (exp. 427.98mln). Payment transactions 6.80bln (exp. 6.60bln). Sees FY24 Adj. EPS USD 5.10 (exp. 5.49). Sees FY24 share repurchase of at least USD 5bln. (Newswires)

Tesla (TSLA) -Confirmed that it plans to restart production at Gigafactory Berlin next week after shutting it down due to supply issues, according to Electrek. (Electrek)

Walt Disney Co (DIS) - Q1 2024 (USD): Adj. EPS 1.22 (exp. 0.99), Revenue 23.55bln (exp. 23.64bln). Disney boosts cash dividend by 50% and targets USD 3bln buyback in FY24. Disney+ subscribers 149.6mln (exp. 151.2mln). Entertainment revenue USD 9.98bln (exp. 10.52bln). Sports revenue USD 4.84bln (exp. 4.62bln). Experiences revenue USD 9.13bln (exp. 9.04bln). Sees FY Adj. EPS about USD 4.60 (exp. 4.27). CEO Iger said parks and resorts continue to do extremely well. Co. is to invest USD 1.5bln in Fortnite maker Epic Games. (Newswires)

08 Feb 2024 - 06:57- Research Sheet- Source: Newsquawk